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Friday, 19 December 2014

This is the last post on this site for the year so I thought I’d try make it a fun one. In this post I take a look at six fun ideas that might help you reduce your emissions. If you have some more ideas drop them in the comments below.

1)Quit your job!

Okay maybe that’s a bit extreme, but the best predictor of consumption emissions seems to be your expenditure. But if you are considering cutting back your hours, well now you know it could help the planet. (Actually it’s ultimately humans you’re helping, not so much the planet. Planets don’t have feelings.)

I read an inspiring story recently about Dr Donald Berwick, former CEO of the US Institute for Healthcare Improvement (IHI). His research showed that hospitals were repeatedly making avoidable mistakes that were costing patients’ lives. Although he only had a tiny staff and limited resources, he decided that things needed to change. At a convention of US hospital administrators in 2004, he set out a challenge: saving 100,000 lives in the next 18 months. He spoke to the heart of why change was needed, identified six clear, manageable interventions and launched a campaign to enrol hospitals in making the necessary changes. He knew it would be hard for hospitals to admit they were routinely making mistakes and change standard practices, but he made it easy for hospitals to join and provided mentoring, information sharing and feedback. Eighteen months later, they had prevented an estimated 122,300 avoidable deaths (Heath and Heath 2010).

How does this story relate to climate change? Collectively our society is repeatedly taking avoidable actions which are changing the climate and causing harm. Like the hospitals at the beginning of the story, we have practical solutions with valuable benefits at our fingertips but we aren’t using them seriously yet. Fundamentally, the challenge of climate change is a challenge of people change. In government departments, businesses and households, our lack of willingness to change is the figurative “elephant in the room.”

Wednesday, 3 December 2014

Farming is a risky business, as is forestry. You are at the whim of the weather and international commodity prices which, as we have been reminded by recent dairy prices, can drop rapidly without much warning. Meanwhile, farmers have to make long term decisions about capital investments, or decide whether to convert from one type of a farm to another. Foresters must plant trees which won’t pay off for several decades. Given the importance of rural land use for New Zealand’s economy and environment, it is important that we understand better how land use changes in response to economic drivers.

For my honours thesis last year I decided to look into recent rural land use changes in New Zealand and whether changes may be associated with recent commodity prices and land sales. I’m very happy that my thesis has now taken the form of a Motu Working paper, which has just been released. In lieu of you having to read the full paper (though of course I encourage you to do so!), here is a quick summary of some things I learnt along the way.

Tuesday, 25 November 2014

The electricity market is a complex beast; people spend
their entire careers examining and analysing its inner workings. For most of
us, our only interaction with the market is through our electricity provider.
We get the monthly bill, try to pay it on time to get the prompt payment
discount, and receive a letter almost every year telling us that prices are,
surprise surprise, going up. We may occasionally ask ourselves “what’s happened
this time to make prices go up?” Usually the price increase is blamed on the
transmission companies, but since 2011 electricity prices have been influenced
by a new price – the price of carbon.

But just how does the price of carbon affect the price you
pay for the electricity you use? Two issues immediately come to mind when thinking
about the impact of the carbon price on residential electricity prices: the
‘peakiness’ of residential electricity demand, and uncertainty about the future
carbon price.

Monday, 10 November 2014

On 2 November 2014, the Intergovernmental Panel on Climate Change released its Synthesis Report 2014 with the headline "Climate change threatens irreversible and dangerous impacts, but options exist to limit its effects." The report is a strong reminder that limiting temperature increases below 2° Celsius relative to pre-industrial levels could entail reducing emissions by 40-70 percent of 2010 levels by 2050, and bringing net emissions near or below zero by 2100. It emphasises the clear benefits of near-term action given the inertia of economic and climate systems.

A White House report issued in July 2014 also highlights the global costs of delaying action to reduce emissions. Two key findings were:

Based on a leading aggregate damage estimate in the climate economics literature, a delay that results in warming of 3° Celsius above preindustrial levels, instead of 2°, could increase economic damages by approximately 0.9 percent of global output… The incremental cost of an additional degree of warming beyond 3° Celsius would be even greater. Moreover, these costs are not one-time, but are rather incurred year after year because of the permanent damage caused by increased climate change resulting from the delay.

An analysis of research on the cost of delay for hitting a specified climate target (typically, a given concentration of greenhouse gases) suggests that net mitigation costs increase, on average, by approximately 40 percent for each decade of delay. These costs are higher for more aggressive climate goals: each year of delay means more CO2 emissions, so it becomes increasingly difficult, or even infeasible, to hit a climate target that is likely to yield only moderate temperature increases.

The global case for near-term action is clear. What about the case for near-term action in New Zealand?

Wednesday, 29 October 2014

In the first post in this series I described climate change as a classic free-rider problem and I described the standard solution of government to these problems. Recognising how difficult this solution can be at a global level I then delved into some of the empirical literature on cooperation. In this post I want to discuss some insights from behavioural economics. I’ve got three topics in mind: energy-cost myopia, nudges, and defaults.

Thursday, 23 October 2014

By Scott White and Catherine Leining, Motu Economic and Public Policy Research

Individuals can make a difference on climate change through their actions as citizens, consumers, organisational members and activists. In New Zealand’s context, how can we motivate more people to take the more effective types of mitigation actions? Why are some people willing to mitigate beyond their self-interest, while others fail to mitigate even when that should be in their self-interest? We will be exploring these issues in a series of posts on shifting New Zealanders’ behaviour to lower emissions.

The story of New Zealand’s increasing greenhouse gas emissions since 1990 is not just about increasing exports and population growth. According to one international study, from 1990 to 2010, New Zealanders’ personal consumption emissions per capita increased 21%, from 7.6 to 9.2 tonnes of carbon dioxide equivalent (t CO2e) per year. This has occurred despite substantial increases in both the evidence base for human-induced climate change and media coverage of climate change science and impacts. Among individuals we can observe two clear disconnections that create significant barriers to effective action.

Thursday, 16 October 2014

A report released September 29th 2014 by the Bulletin of the American Meteorological
Society has addressed the causes of sixteen individual extreme weather
events which occurred around the world in 2013, and specifically examined the
role of anthropogenic (human-induced) climate change in each case. The report, “Explaining
Extreme Events of 2013 from a Climate Perspective”, was compiled by 92
scientists worldwide and found a mixture of results when detecting a ‘climate
change signal’ in an extreme event. The Guardian provides a good summary of the
results here.

I was the lead author on an article within the report which
focused on the North Island drought from the summer of 2013. The New Zealand
Treasury estimates the drought cost the economy at least NZ$1.5 billion, with
associated impacts expected for at least two years following the event. The
role of our analysis was to understand how the likelihood of this type of event
has changed as a direct result of anthropogenic changes to the climate system –
this includes both greenhouse gas emissions and, because of our Southern
Hemisphere location, ozone depletion.

Thursday, 9 October 2014

Crowdsourcing is cool. The internet is cool. Contests are fun. Why not set up an online contest that uses crowdsourcing to find solutions to climate change problems? Climate CoLab at the MIT Center for Collective Intelligence does exactly that.

Wednesday, 24 September 2014

This article is a condensed version of “Technology Policy and Climate Change,” Climate Change Economics, 3(4) 2012. This version has also appeared in the December 2013 Motu Research Update. If you are interested in staying up to date with Motu's research please sign up to our newsletter.Like most economists, I believe that the primary policy response to the climate change challenge must be to raise the price associated with the emission of greenhouse gases (GHGs), in order to create the appropriate economic incentives to align economic activities—production, consumption, and investment of all kinds—with the social objective. Despite the current political controversies surrounding such policies, and the low prices currently imposed on GHGs in several jurisdictions that have implemented emissions trading systems, I believe we will eventually see significant effective prices on GHG emissions in many countries. In this article, I argue that the implementation of such policies is necessary but not sufficient as a global response to the climate challenge. Emissions policy should be complemented by “technology policy,” i.e. a set of actions designed to foster the creation, improvement and diffusion of new low-GHG technologies.

Friday, 19 September 2014

Land-use models are used to explore possible futures, anticipate and diagnose problems, and simulate the effects of different policies. ‘All models are wrong but some are useful’ and more carefully developed and rigorously tested models are more useful. If you are interested in how land-use models are and should be used, our recent paper on land-use modelling provides a non-technical overview of the land-use models currently used in New Zealand.

Wednesday, 17 September 2014

If global mitigation to achieve a 450 ppm stabilisation target were done efficiently, 70% of the costs would be incurred in developing countries according to modelling by Edmonds et al 2008. This is challenging when developing countries face strong competing priorities and limited resources. However some developing countries are leading the way, creating the first steps that could allow them to take serious action – and facilitate significant resource transfers to help them do it.

Wednesday, 3 September 2014

The World Bank and partners are inviting national and local governments and companies to show support for putting a price on carbon emissions by signing up to a pledge that will be circulated at the United Nations Secretary-General’s Climate Summit on 23 September 2014. To date, over 35 governments and 270 companies have participated. The key section of ‘Putting a Price on Carbon’ reads as follows:

Monday, 1 September 2014

In my last post I told a simple story of climate change as a free-rider problem. The view I sketched there looked pretty grim: rational self-interested people won’t achieve cooperation. The idea is not new: many people interpret Thomas Hobbes’ ‘state of nature’ where the life of man is “solitary, poor, nasty, brutish, and short” as the result of some sort of cooperation problem that the government is required to solve. Here I want to talk about the evidence that even in stylized settings, where purely self-interested rational people would not cooperate, we actually do observe cooperation (albeit imperfect).

Monday, 18 August 2014

The biggest environmental issue that New Zealand must address seriously now is climate change mitigation. In doing this we need to show leadership, use science (especially economics and psychology), and have politics focus on what really matters to voters.

Why climate change?It is irreversible, cumulative, systematic (affects all aspects of life on earth), and complex. While solutions need not be expensive if done well, they will involve all aspects of our society: economy, culture, diet, identity, recreation …

Climate change is the greatest threat to our biodiversity, water resources and oceans in the long term. In contrast to climate change, water issues are mostly reversible and biodiversity issues are more focused in both the effects and the solutions.

Addressing these other environmental issues is good and will often help with climate change but we cannot effectively address climate change only through related issues: significant opportunities will be missed and some effort will be misdirected. For example many people still talk about insulation programs as climate policy despite strong evidence that in the short run at least, they have had almost no effect on emissions.

So what should we be discussing about climate change in the context of the election?

Tuesday, 12 August 2014

This is the first of a series of posts on climate change and the different perspectives offered from within economics. This first post sets the scene by framing climate change as a free-rider problem.

Most weekends I like to drive out to Makara Beach, about a half hour drive from where I live. I like to sit in the café, order a cheese and onion toasted sandwich, drink coffee, and eat chips. It’s an enjoyable way to spend a Sunday. But it’s likely one of the most emissions-intensive ways to spend my time. I know climate change is a problem. I know that it makes economic sense for us to mitigate. I know that climate change might even alter my enjoyment of trips to Makara or lower my future earnings through its effect on the economy in general. But I also know that whether or not I go out to Makara will make no detectable difference to the Earth’s climate. My carbon emissions may be high but they are a drop in the ocean of global emissions. When mitigating my carbon emissions is costly I have an enormous incentive to ‘free-ride’. The cost could be in terms of money, in the case of investing in a solar panel for my home, or it could be in terms of the quality of my leisure, in the case of my visits to Makara.

Friday, 8 August 2014

Corey Allan, Research Analyst, Motu Economic and Public
Policy Research

With only 99 regulated participants, New Zealand is able to cover 100% of its CO2
emissions from the energy sector (liquid fossil fuels and stationary energy) in
the NZ ETS. Europe has only managed to cover 43% of total GHG emissions from
energy, in a scheme where more than 11,500 installations are covered. New
Zealand has been able to obtain full coverage because of a unique feature of
its scheme – we placed the point of obligation for the energy sector upstream.
The rationale behind an upstream point of obligation is discussed in a recent paper co-authored by Suzi Kerr. The paper highlights the benefits of an
upstream point of obligation in energy and the lessons that China (and other
countries) could draw from New Zealand’s experience with an upstream point of
obligation.

Thursday, 17 July 2014

The ‘social cost of carbon’ (SCC) is the estimated cost of
the damage caused by each additional tonne of carbon dioxide (or its
equivalent) released into the atmosphere. In practical terms, it tells us how much money
we can save from avoided damages when we reduce each tonne of greenhouse gas
emissions.

The global divestment campaign has recently started to have
an influence in New Zealand too. While our universities do not have large
endowments like their US counterparts, other organisations, such as Westpac,
have been targeted by activists for supporting fossil-fuel-related ventures.
State-owned funds also have large investments in oil, gas and coal companies. While
these entities have actively divested from the nuclear industry in the past,
they seem unwilling to do the same for fossil fuels at present. Here, we look
at how New Zealand organisations, both government and commercial, are influenced
by the fossil fuel divestment debate, and how one New Zealand city is leading
by example.

Friday, 27 June 2014

Do you know where your savings in KiwiSaver
are being invested? If you care about which companies your savings are
supporting, your input can help drive demand for a sustainable KiwiSaver fund.
At the Sustainable Business Network (SBN), we would love to hear your views, sotake this quick survey(less than five minutes) and be part of a collective voice.

Wednesday, 18 June 2014

The world is dangerously unprepared for climate impacts on food - yet food companies are major contributors to greenhouse gas emissions and deforestation. Here Sarah Meads explains why food and beverage companies need to clean up their act.

What has climate change got to do with food and beverage companies? In brief, agriculture and deforestation (largely driven by the expansion of agricultural land) are responsible for around 25% of global emissions. At the same time, climate change presents a major risk to food supply chains and ultimately to the profitability of the 10 biggest food and beverage companies and to the food industry worldwide.

Monday, 16 June 2014

Fossil fuel divestment
is a rapidly expanding idea and shareholders in the fossil fuel industry now
face a curious new reality. Everyone knows about the potential power of a positive
feedback effect: an action which reinforces the initial direction of change. In
terms of the physical response to climate change, we can think of the Arctic -
melting ice leads to more exposed ocean, resulting in less sunlight reflection,
more heat absorption and hence further ice melt. Fossil fuel divestment can be
seen in the same way as our CO2 emissions were for the Arctic;
investors have the ability to start the snowball effect. Though the financial
risk to investors may be too low to necessitate divestment in the near term, doing
so now will help to actively destabilise future fossil fuel assets, thereby
making the concept of divestment more financially attractive for others shareholders
later.

Sunday, 8 June 2014

Post by Judd Ormsby Research Analyst, Motu Economic and Public Policy Research

The May 2014 edition of Policy Quarterly contains an article by Adrian Macey titled “Climate Change: Towards policy coherence”. Adrian Macey, New Zealand’s former Climate Change Ambassador, is an adjunct professor at the New Zealand Climate Change Research Institute and a member of Motu’s Low-Emission Future Dialogue. In the article Macey gives an overview of the international negotiations and a good assessment of the key challenges for New Zealand’s international contribution and domestic policy. The piece has already made an impact, featuring in this discussion in Parliament between Kennedy Graham, (Green Party) and the Minister for Climate Change Issues, Tim Groser.

Macey’s paper is short (less than 10 pages), and well written, but covers a fair few issues so I’ll direct you to the original instead of offering a (less well written) summary. I will mention a couple of things however.

Friday, 6 June 2014

By Catherine Leining, Policy Fellow, Motu Economic and Public Policy Research

On 5 June 2014, Paul Young, a co-founder of Generation Zero and a participant in Motu's Low-Emission Future Dialogue, hosted a live chat on the website of the New Zealand Herald on the theme of "What's next for climate change action?" This was part of an ongoing series organised by Element and the Centre for NZ Progress on what New Zealand might look like in 2025.

Paul launched the chat with an article highlighting the global warming challenge, New Zealand's current situation and - most importantly - some practical solutions that could help New Zealand to phase out fossil fuels by 2050. The chat elicited some thoughtful questions from readers, ranging in interest from the recent carbon tax proposal from the Green Party to which energy solutions are feasible in the New Zealand context, what we can learn from other countries and how we can overcome political polarisation.

Friday, 30 May 2014

By Catherine Leining, Policy Fellow, Motu Economic and Public Policy Research

In the wake of releasing Budget 2014 on 15 May 2014, the New Zealand Government introduced the Climate Change Response (Unit Restriction) Amendment Bill directed at preventing “reregistration arbitrage” by post-1989 forestry participants in the New Zealand Emissions Trading Scheme (NZ ETS) (New Zealand Government 2014). The immediate passage of the Bill with effect from 16 May 2014 provoked strong protests and has implications for the future operation of the scheme. This situation highlights how a loss of confidence in Government rulemaking can weaken economic incentives for sound investment decisions.

Friday, 23 May 2014

Recent climate modelling research has found that countries
with high emissions of short-lived climate pollutants (SLCPs) should keep
mitigation of carbon dioxide (CO2) a top priority, and working to
reduce methane emissions in isolation will not be any more effective than doing
so in several decades time. In essence, “action on short-lived climate
pollutants will not ‘buy time’ to delay action on carbon dioxide”, says co-author
Professor David Frame, director of the New Zealand Climate Change Research
Institute.

Monday, 19 May 2014

Foreword by Catherine LeiningThis week, we feature a New York Times opinion piece, written by esteemed United States economist, Paul Krugman. He presents an argument for informing public debate relating to climate policy in a non-partisan way, using clearly presented economic ideas. While the United States faces more issues in navigating past political ideologies that distinguish themselves by proud defiance of factual information, New Zealand has also experienced its share of uninformed political debate and lobbying that exaggerate the costs and overlook the benefits of mitigating climate change. The most recent assessments from the Intergovernmental Panel on Climate Change clearly reinforce that globally, the benefits of reducing emissions far outweigh the costs. In New Zealand’s case, we need to thoughtfully apply wise climate economics as we prepare our emissions-intensive economy to compete under increasing global carbon constraints and encourage other countries to take effective action.

Friday, 9 May 2014

A recent post by Catherine Leining, ‘The trillion tonne
challenge: Think cumulatively, act immediately on infrastructure’, explores the
significance of limiting our cumulative carbon emissions to one trillion
tonnes, and how keeping to such a target might be approached. But where has
this number come from? How is it calculated? And why is it such a significant
realisation when it comes to defining mitigation targets?

Thursday, 1 May 2014

By Corey Allan, Research Analyst, Motu Economic and Public
Policy Research

How should we compare efforts to reduce greenhouse gas
emissions across countries? The Kyoto Protocol focuses on production emissions,
which are the emissions resulting from the production of goods and services.
But what is the point of production? Would we produce goods if there was no one
to consume them? In a globalised world, production will move from one country
to another if there is still sufficient demand for the output. So is a country
really contributing to the reduction of greenhouse gas emissions as much as it
appears if their production emissions are falling, but their consumption of
emissions-intensive goods remains unchanged?

Saturday, 26 April 2014

By Catherine Leining, Policy Fellow, Motu Economic and Public Policy Research

In the international climate change negotiations, countries agreed to the global goal of limiting warming above pre-industrial levels to not more than 2 degrees C. According to the IPCC’s Fifth Assessment Report, to maintain a 66% chance of achieving that goal, cumulative anthropogenic CO2 emissions starting from the period 1861-1880 must remain below about 1 trillion tonnes of carbon (3.67 trillion tonnes of CO2). That drops to an even more restrictive budget when non-CO2 greenhouse gases are taken into account.

Monday, 14 April 2014

A press release by Z Energy on 3rd April 2014
marks the next step in alternative fuel developments in New Zealand. CEO Mike
Bennetts announced a plan to invest $21 million toward a biodiesel
manufacturing plant in Auckland, with a particular focus on tallow as the
organic derivative of choice. Previous large-scale biofuel generation schemes
have been met with varying levels of success in New Zealand (particularly the foray by Solid Energy in 2007) - this is actually acknowledged by Bennetts in
the statement. Though this latest proposed operation will only make a small
dent in the goliath that is fossil fuel demands for domestic transport,
it is a promising step in the right direction – Z should be applauded for
taking a leadership role in such an area.

Tuesday, 8 April 2014

On 21 March 2014, the Royal Society of New Zealand (RSNZ)
released a panel report, ‘Facing the future: towards a green economy for NewZealand’, discussing the potential opportunities, as well as
difficulties, involved with New Zealand moving towards a green economy. The
United Nations Environment Program defines a green economy as ‘low carbon,
resource efficient and socially inclusive’. Those all sound like attributes
that we as a nation should want to embody, so how do we get there? And what are
the hurdles that might make the path a bit tough?

About this Blog

What are New Zealand’s possible pathways toward a global low-emission future, and what important choices lie ahead? This blog creates a forum for sharing information and perspectives about the mitigation challenges that New Zealand faces, the assets that we have, the solutions that might be developed or adapted, the lessons we can learn from overseas and the experience that we can offer to other countries.

This blog is part of Motu's Low-Emission Future project. See our about page for more information on the blog and see here for more information about the project.

The posts and comments on this blog are the views of the specific author; they are not the views of the author's organisation, other contributors, Motu Economic and Public Policy Research, the programme's funders, or the New Zealand Climate Change Research Institute.